401k Business Funding – Employee Participation

If I use my 401k to fund my existing business (i.e., 401k existing business financing), can my employees participate in the company’s 401k plan?


If you use a 401k business funding strategy to fund your existing franchise or other small business, your company will need to adopt a 401k. Any other full-time employees must be given an opportunity to participate in the plan including rolling over retirement funds into the 401k, and if they elect to do so, the opportunity to invest eligible rollover retirement funds into the company. It is a recommended “best practice” to obtain the employees’ signed acknowledgement upon receipt of the summary plan description and keep this with the records of the plan.